Cognizant Technology Solutions (NASDAQ:CTSH) Releases Earnings Results, Misses Estimates By $0.01 EPS

Key Points

• Quarterly results were mixed: Cognizant reported $1.37 in EPS, missing estimates by $0.01, while revenue reached $5.48 billion and rose 4.5% year over year. Financial Services led growth with a 12% revenue increase, and adjusted operating margin expanded to about 16%.
• Outlook reflects cautious client spending: The company lowered full-year revenue-growth guidance to 4%–5.5% in constant currency because of macroeconomic uncertainty and pressured discretionary IT budgets, but raised adjusted 2026 EPS guidance to $5.70–$5.82.
• AI demand and shareholder returns remain key positives: Cognizant cited more than 8,000 AI engagements, solid bookings momentum and plans to expand its AI workforce, while returning approximately $1.1 billion through share repurchases during the quarter.

Cognizant Technology Solutions (NASDAQ:CTSH - Get Free Report) posted its quarterly earnings results on Wednesday. The information technology service provider reported $1.37 earnings per share for the quarter, missing the consensus estimate of $1.38 by ($0.01), Zacks reports. The company had revenue of $5.48 billion for the quarter, compared to the consensus estimate of $5.48 billion. Cognizant Technology Solutions had a net margin of 10.41% and a return on equity of 17.50%. The business's revenue was up 4.5% on a year-over-year basis. During the same period in the prior year, the firm posted $1.31 EPS. Cognizant Technology Solutions updated its FY 2026 guidance to 5.700-5.820 EPS.

Here are the key takeaways from Cognizant Technology Solutions' conference call:

• Second-quarter revenue grew 4.1% year over year in constant currency to $5.5 billion, with financial services leading at nearly 12% growth and adjusted operating margin expanding to 16% excluding special items.
• Bookings momentum remained solid, with seven deals above $100 million in total contract value, including three new logos; trailing-12-month bookings rose 5% with a 1.3 book-to-bill ratio, while financial-services demand continued to strengthen.
• Cognizant reported expanding AI traction, including more than 8,000 AI engagements, over 40% of software development being AI-assisted, and plans to scale its frontier workforce to 5,000 certified engineers and 10,000 frontier business operators.
• The company reduced full-year revenue growth guidance to 4%-5.5% in constant currency from its prior outlook, citing persistently elevated macro uncertainty and pressured discretionary spending, although it expects large deals to ramp in the second half.
• Adjusted EPS guidance increased to $5.70-$5.82, and Cognizant returned $1.1 billion through second-quarter share repurchases while remaining on pace to return approximately $2.6 billion to shareholders this year.

Cognizant Technology Solutions Stock Performance

NASDAQ:CTSH traded up $5.65 during trading hours on Wednesday, hitting $55.96. 4,867,102 shares of the company were exchanged, compared to its average volume of 8,238,286. The company has a debt-to-equity ratio of 0.04, a current ratio of 2.23 and a quick ratio of 2.23. Cognizant Technology Solutions has a 52-week low of $37.08 and a 52-week high of $87.03. The stock has a market capitalization of $26.52 billion, a price-to-earnings ratio of 12.14, a PEG ratio of 1.03 and a beta of 0.87. The company's 50 day moving average price is $47.04 and its 200-day moving average price is $59.01.

Cognizant Technology Solutions announced that its board has approved a share repurchase program on Monday, May 18th that authorizes the company to repurchase $2.00 billion in shares. This repurchase authorization authorizes the information technology service provider to repurchase up to 9% of its stock through open market purchases. Stock repurchase programs are generally a sign that the company's leadership believes its shares are undervalued.

Institutional Investors Weigh In On Cognizant Technology Solutions

Several hedge funds have recently bought and sold shares of CTSH. Brighton Jones LLC acquired a new stake in shares of Cognizant Technology Solutions during the 4th quarter valued at about $214,000. Geneos Wealth Management Inc. boosted its holdings in shares of Cognizant Technology Solutions by 118.8% during the 1st quarter. Geneos Wealth Management Inc. now owns 569 shares of the information technology service provider's stock worth $44,000 after purchasing an additional 309 shares during the last quarter. Acadian Asset Management LLC purchased a new position in shares of Cognizant Technology Solutions during the 1st quarter worth $142,000. Cresset Asset Management LLC boosted its holdings in Cognizant Technology Solutions by 11.4% in the 2nd quarter. Cresset Asset Management LLC now owns 9,160 shares of the information technology service provider's stock valued at $715,000 after purchasing an additional 935 shares during the last quarter. Finally, Jump Financial LLC raised its position in Cognizant Technology Solutions by 231.4% in the second quarter. Jump Financial LLC now owns 29,667 shares of the information technology service provider's stock valued at $2,315,000 after purchasing an additional 20,716 shares during the period. Hedge funds and other institutional investors own 92.44% of the company's stock.

Analysts Set New Price Targets

CTSH has been the topic of several recent research reports. Jefferies Financial Group dropped their target price on shares of Cognizant Technology Solutions from $80.00 to $65.00 and set a "buy" rating on the stock in a report on Monday, May 4th. Citigroup reduced their price target on shares of Cognizant Technology Solutions from $55.00 to $45.00 and set a "neutral" rating for the company in a report on Monday, July 13th. Berenberg Bank set a $59.00 price target on shares of Cognizant Technology Solutions and gave the stock a "hold" rating in a research report on Wednesday, June 17th. TD Cowen cut their price objective on shares of Cognizant Technology Solutions from $62.00 to $47.00 and set a "hold" rating on the stock in a report on Friday, June 26th. Finally, Deutsche Bank Aktiengesellschaft set a $55.00 price objective on shares of Cognizant Technology Solutions in a research note on Friday, July 10th. Ten equities research analysts have rated the stock with a Buy rating and fourteen have given a Hold rating to the stock. Based on data from MarketBeat.com, the stock currently has a consensus rating of "Hold" and an average price target of $61.35.

Key Cognizant Technology Solutions News

Here are the key news stories impacting Cognizant Technology Solutions this week:

• Positive Sentiment: Improved full-year earnings outlook: Cognizant raised its 2026 adjusted diluted EPS guidance to $5.70-$5.82 from $5.69 consensus, while maintaining adjusted operating-margin guidance of 16.0%-16.2%. Cognizant Reports Second Quarter 2026 Results
• Positive Sentiment: Solid second-quarter performance: Revenue rose 4.5% year over year to $5.481 billion, operating margin expanded to 15.9%, adjusted EPS increased 4.6% to $1.37, and trailing 12-month bookings grew 5% to $29.1 billion. Financial Services revenue was particularly strong, rising 12%. Cognizant Q2 Revenue Results
• Positive Sentiment: Capital returns supported sentiment: The company deployed approximately $1.1 billion on share repurchases during the quarter, including 22.5 million shares, which can support per-share earnings and signal management’s confidence in valuation. Cognizant Reports Second Quarter 2026 Results
• Positive Sentiment: AI growth catalysts: Cognizant launched an EMEA AI unit to help businesses scale agentic-AI projects and recently expanded its partnership with Anthropic. It also won a five-year technology and AI modernization engagement with The Andover Companies. Cognizant Launches EMEA AI Unit
• Negative Sentiment: Near-term revenue guidance was cautious: Third-quarter revenue is projected at $5.6-$5.7 billion, roughly in line with or below Wall Street expectations, as clients remain conservative on discretionary IT spending and prioritize data-center infrastructure over software investments. Cognizant Forecasts Weak Quarterly Revenue
• Negative Sentiment: Minor earnings miss: Adjusted quarterly EPS of $1.37 narrowly missed the $1.38 consensus estimate, although it improved from $1.31 a year earlier. Cognizant Lags Q2 Earnings Estimates

About Cognizant Technology Solutions

Cognizant Technology Solutions NASDAQ: CTSH is a global professional services company that provides information technology, consulting and business process services to large enterprises. Its core offerings include digital engineering, application development and maintenance, cloud migration and managed services, data analytics and artificial intelligence, cybersecurity, and industry-specific solutions. Cognizant works with clients to design and implement technology-enabled transformations that address customer experience, operational efficiency and new product and service delivery.

Founded in the 1990s and headquartered in Teaneck, New Jersey, Cognizant has grown into a multinational organization with delivery centers and operations across the Americas, Europe, and Asia.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.